Paul Linford's Companion Blog. Because the Personal is not always Political

Friday, March 14, 2008

At our best when we are boring

Column published in the Newcastle Journal, 15 March 2008

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Having sat through every one of New Labour’s Budgets – latterly via the telly rather than live in the Commons Chamber - I have no hesitation in declaring this year’s the most boring of the lot.

We were told not to expect any surprises, and Wednesday’s 50-minute speech by Chancellor Alistair Darling certainly lived down to its billing.

But the fact that it was, by some distance, the most politically unexciting Budget for more than a decade does not necessarily make it a bad Budget.

Indeed, if Mr Darling is proved right in his central contention that Britain is well-placed to weather the global economic slowdown, it could even turn out to be an election-winning one.

From the opening minute, in which the word “stability” was mentioned no fewer than four times, the Chancellor’s message was clear: the British economy is safe in my hands.

And just as Mr Darling’s personal unflashiness is designed to present a reassuring front, so there was something rather comfortingly reassuring about the content of his speech.

It was a bit of a nostalgic throwback to the Budgets I was used to when I was growing up in the 60s and 70s – booze, fags and petrol up, and little else to write home about.

The lack of excitement was purely deliberate. As one commentator put it: “I suspect that the government will be quite pleased if this Budget is nothing more than a one-day story.”

Before looking in any further detail at Mr Darling’s package, let me make my now customary declaration of interest.

I will in fact be better off as a result of the forthcoming tax changes by around £331 a year, but most of that is down to the 2p reduction in income tax announced by Gordon Brown last year.

But as the driver of a Vauxhall Zafira who likes the odd drop of Scotch, the announcements made on Wednesday alone will actually leave me marginally worse off.

The increases in alcohol duties will set me back by approximately £28 a year, while the extra vehicle excise duty on my gas-guzzling but child-friendly people carrier will cost an additional fiver.

As a middle-income earner who nevertheless supports the principle of redistributive taxation, I would normally be quite content with this

Certainly, if I thought my £33 was going towards helping to take 250,000 children out of poverty, as was Mr Darling’s stated aspiration, I would be more than content – but that’s a big if.

The best that can be said is that the government’s heart is in the right place. “Where money can be spent, it goes on child poverty. This is simple, authentically Labour, and right,” said one left-leaning pundit.

But whatever the government’s good intentions in this area, its record is, to say the least, mixed – as for instance was shown by the widening health inequality figures published this week.

Similarly, if I thought my extra alcohol taxes were helping to curb the binge drinking culture that has blighted so many of our town and city centres, I would be satisfied.

But while I have no doubt that the price of alcohol does have some impact on consumption, this is an even bigger “if.”

The use of alcohol duties to curb binge drinking is really a very blunt instrument for tackling a complex problem which requires much subtler, more targeted measures.

If anything, the government should be clamping down on supermarkets who sell cheap booze, not putting more pubs out of business by raising prices across the board.

Neither did the Budget quite manage to live up to its advance hype as “greenest ever.”

On the plus side, the new higher rates of vehicle excise duty for gas guzzlers and the threat to force supermarkets to charge for plastic shopping bags will no doubt bewelcomed by environmental campaigners.

But against that, fear of fuelling inflation forced Mr Darling to compromise his green credentials somewhat by postponing the planned 2p increase on petrol.

And just as no government that is introducing ID cards can seriously claim to champion the cause of liberty, so no government so dedicated to airport expansion can seriously claim to be “green.”

What, though, of the macroeconomics? This is, in the end, the measure by which the 2008 Budget will be judged.

The argument is not really about what could be done in this year’s Budget to deal with the global “turbulence.” The truth is that Mr Darling had very little room for manoeuvre.

No, the real argument is about what the government – and specifically Gordon Brown as Chancellor – has done over the preceding decade, and what state it has left the economy in.

Specifically, it is about whether, as Mr Darling claims, Britain is now best-placed to weather the global crisis, or whether as Tory leader David Cameron argues, it is in fact worst-placed.

We won’t know who is right about this for at least 18 months to two years – but on the answer to this question will almost certainly hang the result of the next general election.

If Mr Darling turns out to be wrong, it will leave Labour’s reputation for economic competence shredded beyond recall, and Mr Cameron heading for a landslide.

But if it turns out that Mr Brown’s long stewardship of the Treasury did indeed leave Britain best-placed to weather the storm, then Labour will in all probability win an unprecedented fourth term in government.

In those circumstances, New Labour’s most boring Budget could also turn out to be one of its best.